Ready to Form an LLC in California?

STEP 1) VERIFY & SECURE YOUR LLC NAME

The first step is making sure the brand name you want is unique, not misleading, doesn’t contain any restricted words, and isn’t too similar to any other names registered in California State Records. Conduct a Business Entity Search through the state as well as a quick trademark search using the TESS System through the U.S. Patent Office.

Keep in mind the name must contain the words ‘Limited Liability Company’ or ‘Limited Liability Company’ or abbreviations like ‘LLC’ or ‘L.L.C.’ can also be used. If needed, and available, you can file a Name Reservation Request form for $20 and reserve the name for 60 days.

STEP 2) APPOINT A REGISTERED AGENT

The next logical step is appointing a Registered Agent to receive and help to handle/process all official documents like state filings, tax forms, legal notices, etc. To be considered the agent must be a CA resident or registered business entity with a physical street address, not a P.O. Box. Furthermore, there should only be one for your LLC, and you cannot elect yourself.

So you can hire a professional that charges as much as $160 a year, or you can can get a qualified/certified registered agent free of charge by Incorporating with IncFile.

STEP 3) FILE ARTICLES OF ORGANIZATION

In order to legally conduct business you must file Articles of Organization with the California Secretary of State’s office.

First complete the LLC-1 form. have it notarized by an authorized individual and then submit it with the current filing fee either online or through postal mail. You’ll have to check and see if there are any current expedited delivery options.

Filing Fee: $70

STEP 4) GET AN EIN FOR YOUR LLC

A EIN, or Employer Identification Number, is required if you want a smooth tax season, to be able to set up a business bank account, legally hire employees and so forth. So it’s not optional by any means.

Thankfully you can easily get your EIN free of charge through the IRS Website.

STEP 5) OPEN A BUSINESS BANK ACCOUNT

There are two primary reasons to open unique business bank accounts, the first of which has everything to do with the many perks banks and lending institutions are offering these days. There are a fair amount so be sure and check around if you aren’t familiar.

The second has to do with making your finances easier by syncing the single account with your accounting software, and adding a HUGE layer of protection by being separated from any other business/personal accounts.

STEP 6) DRAFT AN OPERATING AGREEMENT

This is a formal contractual agreement between all owners of a company that outlines financial and managerial responsibilities. It’s not mandatory or required by law, but whenever possible one should be in place to protect all parties, including the brand. And yes, even solopreneurs should have one.

STEP 7) HANDLE LLC TAXES & LICENSING

Obviously getting situated with state and federal taxes isn’t optional. These days it can be much simpler though with help. How many licenses you’ll need and how many fees and things will be determined by a number of variables including your type of business, whether you work with the public, location, etc.

OPTIONAL) CREATE A BUSINESS PLAN

A professional business plan is the kind of plan you submit to lending institutions, potential partners, capital investors, and so forth. It’s not a couple scraps of paper, or a whiteboard, but a serious document that outlines every major component of your company.

In California business planning isn’t optional, it’s everywhere! In some parts of California that’s all people ever talk about as they look at each other’s executive summary, pitch, financials, forecasts, marketing methods, etc. If you’re interested, check out our free resources below.

Our free email-based Business Plan Course is specially designed to take you smoothly through the process step-by-step.

OPTIONAL) BUILD A MODERN BUSINESS WEBSITE

Whether you opt for a simple responsive one-page agency site, or a comprehensive ecommerce platform, no brand today will be taken seriously without a digital presence. Plus, there’s just too much sales/marketing potential to ignore the internet…how else will people investigate your brand?

Although building a website was difficult in the early 2000’s, now you can just use a customizable and free tool like WordPress. Learn more and see how to get started in this WordPress Beginners Guide.

Need Help Forming Your LLC?

Have a reliable LLC filing service like IncFile or LegalZoom do the work for you. Just answer a few questions about your business and they’ll take care of the paperwork.

Although both offer virtually the same service, IncFile is $100 less and our top pick. Enjoy!

Note that this article on how to form an LLC in California isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in California or business in general, please consult with a lawyer or other accredited professional.

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